How attractive is Britain to ‘benefit tourists’?

It's been reported that work and pensions secretary Iain Duncan Smith is to challenge the EU commissioner Laszlo Andor after the latter, along with his fellow commissioners, announced that the commission would be taking Britain to court for discriminatory practices in its application of regulations on welfare payments.

It’s been reported that work and pensions secretary Iain Duncan Smith is set to challenge the EU commissioner Laszlo Andor after the latter, along with his fellow commissioners, announced that the EU Commission would be taking Britain to court for discriminatory practices in its application of regulations on welfare payments.

Predictably Duncan Smith’s response – that this is an attempted “land grab” by the Commission – has received far more press coverage than the details of commissioner Andor’s legal challenge.

So what is the commissioner’s problem?

Well since 2004, child benefit, child tax credit, state pension credit and unemployment support allowance have only been paid to those classed as having a ‘right to reside’ in the UK. British nationals are granted this status automatically, but those from elsewhere in the EU must be resident in the UK for at least five years before being granted ‘right to reside’ status.

These rules have been branded unfair by the European Commission for a number of reasons.

One example of the problem with the rules is that technically they could result in a Polish woman who wanted to start claiming benefits (say for a child) after living, working and paying taxes in the UK for two years being unable to, whereas a British woman would be able to, even if she had never worked in her life.

The argument put forward by the government is that any removal of this ‘right to reside’ test would result in an influx of ‘benefit tourists’.

There are several problems with this assertion.

Even if the ‘right to reside’ rule were overturned, it would still be difficult for a migrant from the EU to park themselves on benefits in the UK – let alone come here with the intention of immediately becoming a ‘benefit tourist’.

Something called the habitual residence test, which was introduced in 1994 by John Major’s government, means that before being allowed to claim any benefits in the UK immigrants are interviewed about their reasons for entering the country, how long they have been here, as well as their work status and history.

As a rule a person would need to have been in Britain for at least one to three months before they are able to claim any kind of benefit.

There is always the possibility of course that someone could come to the UK, spend all their money during the first month or so before parking themselves on benefits. However considering the government’s own rhetoric around welfare reform – that it is ‘getting tough’ with those whose ‘curtains are still drawn at midday’ – this seems unlikely.

It is no longer possible for UK citizens to spend a life on benefits without actively looking for work (as the coalition will readily boast), and there is no evidence to suggest migrants from elsewhere in the EU will find the system any easier.

The other thing to note is that there is no precedent for migrants from the EU coming to Britain as benefit tourists. In 2008-09, at the height of Labour’s policy of so-called ‘uncontrolled immigration’, A8 immigrants paid 37 per cent more in direct or indirect taxes than they received in public goods and services.

A8 immigrants contributed 0.96 per cent of total tax receipts and accounted for only 0.6 per cent of total expenditures (see table).

Immigration graph 2

And finally, there’s also the stuff about Britain’s ‘over-generous welfare state’. Here is Fraser Nelson on Question Time in May of 2012:

“Our benefits are some of the most generous in Europe.”

Yet if we look beyond tabloid rhetoric at the fact, it simply isn’t true. A study by the Economic and Social Research Council’s Centre for Population Change (CPC) carried out last year found that the UK had below average levels of welfare spending among developed nations. (See graph).

Welfare systems across Europe

So in conclusion, not only is there no reason to view Britain as any more attractive to benefit tourists than other EU countries, but there is very little reason to think that the removal of the ‘right to reside’ rule would make a significant difference to the numbers of people claiming benefits. In other words, the ‘row’ over commissioner Andor’s challenge to the British government is probably another attempt to ward off UKIP.

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